How to buy an insurance brokerage in Saskatchewan: licences, ownership rules and what transfers

If you want to buy an insurance brokerage in Saskatchewan, start with the licence, because the licence is what makes the business lawful to run. The Superintendent of Insurance administers Saskatchewan’s Insurance Act, and the Insurance Councils of Saskatchewan, including the General Insurance Council for property and casualty business, license and regulate agents, brokers and agencies under authority the Superintendent has delegated. This guide covers Saskatchewan’s rules only. The sections below cover who licenses the agency, why a designated representative matters on a sale, how the insurer’s recommendation can end a licence, and what to ask for. For the wider commercial questions, see the national guide to buying an insurance brokerage.

Who regulates an insurance agency in Saskatchewan

The Insurance Councils of Saskatchewan state that the Superintendent has delegated authority over agents, brokers and adjusters to the General Insurance Council, the Life Insurance Council and the Insurance Council of Saskatchewan. The General Insurance Council says it operates under authority delegated by the Director of the Insurance and Real Estate Division to license and regulate insurance agents, brokers, adjusters and agencies in the province. The Act itself still speaks of the Superintendent, and section 10-1(4) treats a delegate’s exercise of the Superintendent’s powers as the Superintendent’s own. Ask the Councils, not the seller, which of them handles each step of your purchase.

The agency holds its own licence

Section 5-4(1) of The Insurance Act says no business shall act or offer to act as an insurance agent for a class of insurance unless the business holds a valid insurance agent’s licence for that class. Subsection 5-4(2) separately sets when an individual may act as an agent, so the rules reach the agency as well as the people who work in it. When you evaluate a brokerage for sale, find out which classes of insurance the agency is licensed for, because the licence is class by class. Then ask the Councils how your purchase, whether of the business’s assets or of its shares, affects the licence. Section 5-4 does not say that a licence moves with the business to a new owner, so get the Councils’ answer before you commit.

The designated representative is the pressure point

Under section 5-20 of the Act, a business licensed as an insurance agent for life or property and casualty insurance must have a designated representative for that class; under section 5-20(5) this does not apply to a business holding a restricted insurance agent’s licence. That person must be licensed in the class, meet the prescribed requirements, be recommended by the licensed insurer that recommended the business for its licence in that class, and be responsible for receiving notices and other documents on the business’s behalf and for any other prescribed duties. For property and casualty agencies other than crop hail and restricted travel agencies, the General Insurance Council requires an active Level 3 licensee with at least two years’ experience as a property and casualty licensee within the past five years. If the seller is the designated representative and is leaving, you need a qualified replacement lined up before closing.

The Act sets a deadline. If a designated representative resigns or dies, section 5-21(4) requires the business to submit a written designation of a new individual to the Superintendent within 14 days. If it does not, section 5-21(5) makes the business’s licence automatically suspended, and under section 5-21(8) the licence of each of its employees is suspended too, within the category limits set by subsections 5-21(9) to (11). The Councils likewise say that failing to appoint and maintain a designated representative results in suspension of the business’s licence.

The insurer’s recommendation and the agency contract

A licence in Saskatchewan rests on an insurer’s recommendation. Under section 5-22(1), if the insurer cancels its recommendation, or the agency contract between the insurer and the business is no longer in force, the business’s licence is automatically suspended unless the business submits a new insurer recommendation to the Superintendent before that happens. Employees’ licences are suspended with it. For a buyer, this makes each insurer’s agency contract something to confirm before closing. Ask each insurer whether it will keep the agency contract in place after the sale, and whether its recommendation stays with the new owner or must be reissued.

Registration, notices and the sale itself

The General Insurance Council says an agency must provide evidence that it is registered with the Corporate Registry of the Information Services Corporation. The Insurance Councils also state that licensees must notify them of decisions or certain changes related to a licence, and they publish a table of those obligations and the timeframes. Read that table against your deal so no change is reported late. On the tax side, the Canada Revenue Agency says that if the business being sold has a GST/HST account, the seller must contact the tax services office to close it.

What to ask the seller for

These requests turn the Saskatchewan rules above into paperwork you can check before you close.

• The agency’s current licence, showing each class of insurance it covers, and the name of its designated representative.
• Each insurer’s written recommendation and agency contract, with any change-of-ownership or termination terms.
• The Information Services Corporation registry record showing the agency’s registration.
• Records of any notifications the agency has made to the Insurance Councils, and any pending decisions.
• The licence status of each employee, since employee licences depend on the business’s licence.